This foreclosure was forged in Trenton

Cathy Dietz was standing in her driveway telling me how the bank was foreclosing on her Hunterdon County home and the 42 acres that surround it. That sort of thing is happening to a lot of people, but in her case the cause had less to do with what's happening on Wall Street these days than with what happened in Trenton four years ago.

In 2004, the Legislature adopted the Highlands Act in an effort to preserve open space. But the open space it was preserving belonged to private homeowners like the Dietz family. Her land was turned from an asset into a liability. When her husband died in January, she found she couldn't meet the mortgage and she couldn't refinance either. ¶

"What can I do?" she asked me. "Can you tell me what to do? "

When I hear such a question from a Highlands property owner, it's usually rhetorical. This was different. Dietz really wanted my advice. She had just come back from picking up her youngest daughter, who attends a private high school across the river in Pennsylvania, and unless she does something fast, her family will be uprooted from the house that has been their home for the past 25 years.

The situation wasn't the least bit funny. But I figured a funny remark might lighten her mood.

"Well, you could have an affair with the governor and then break up with him," I said. "Then he'll pay off your mortgage and pick up the tab for your kid's private-school tuition in Pennsylvania. Heck, it worked for Carla Katz."

That piece of gallows humor cheered her up a bit, but she was still on the gallows. On her way up the driveway, she had stopped at the mailbox and picked up a letter. "This just came today," she said as she handed it to me.

The letter was from a forestry company warning her about yet another set of environmental regulations that could cost her a fortune. Thanks to state Department of Environmental Protection stream encroachment regulations, she had to hire someone at her own expense to look for animals in the woods behind the house, the letter told her.

"You will need to submit a request for endangered species regulations to the state and federal government to determine whether endangered species have been sighted on or near your property. We have been given a deadline of Dec. 31. If you are out of compliance after that date, the DEP is threatening fines of over $25,000 a day per violation," the letter said.

"I feel like I'm in an Orwellian novel," she told me.

It's worse than that. In an Orwell novel, the state would take your property outright. In New Jersey, officials first drive you insane with regulation. Then they take your property.

Dietz's husband committed suicide. He was troubled in his final days, so she is not sure just what drove him to take his own life. But worries about the farm could have contributed to it, she told me.

When he bought the land just south of Route 78 in Union Township, her husband envisioned eventually selling off part of it to create a nest egg for the family. But once the Highlands Act was signed into law, the Dietz family was left with an aging house attached to what is effectively a public park that must be privately maintained.

"I never even had a detention in high school, and now I'm getting all these threatening letters," said Dietz. "I never expected any of this. I mean when your husband dies, it's bad enough. And then when you go to refinance your house, you're in the Highlands Act. What more do you want to do to me?"

That wasn't a rhetorical question either. Dietz directed it at the legislators who voted for the act. They all patted each other on the back for preserving open space. I've yet to hear one of them whisper a word of support for those who lost their land.

The impact was immediate. Up the road a bit in Hackettstown, peach farmer Bob Best had the refinancing on his farm store scheduled for mid-August 2004. But a few days before the closing, Gov. James McGreevey signed the Highlands Act into law. With a stroke of a pen, McGreevey wiped out a million dollars or so of equity in the old farmer's land. The bank backed out, and he lost the store.

And that was back in the good old days of loose mortgages and cheap money. Imagine what it's like now to try to refinance a home in the Highlands. A lot of people who thought they were sitting on a nest egg found that it had turned into an improvised explosive device.

Last year when I wrote about the way Best was hounded into insolvency, I observed that there should be a special circle in hell for those who pretend to do good deeds with other people's money. If there is such a place, both houses of the New Jersey Legislature will never lack for a quorum.